On 30 June 2023, Vax Ltd leased plant from Prologic Ltd. Prologic Ltd had purchased the plant on that day for its fair value of $60 000. The lease agreement, which cost Vax Ltd $1954 and Prologic Ltd $1782 to have drawn up, contained the following.

Lease term	5 years
Annual payment, payable in advance on 30 June each year	$15 000

Estimated economic life of plant	6 years
Estimated residual value of plant at end of lease term	$5 000
Residual value guaranteed by Vax Ltd	$4 000
Interest rate implicit in the lease	6%

Included in the annual payment is an amount of $2 000 to cover reimbursement by Vax Ltd of the costs of insurance and maintenance paid by Prologic Ltd. The lease is cancellable only with the permission of Prologic Ltd. Vax Ltd will return the plant to Prologic Ltd at the end of the lease term. Prologic Ltd is a financier lessor. The lease has been classified as a finance lease by Prologic Ltd. Assume that Vax Ltd expects to make any payments necessary under the guarantee. Both companies have a reporting period ending 30 June.

Required:

Prepare the journal entries recorded by Vax Ltd to initially recognise the lease, and the necessary journal entries related to the lease on 30 June 2024.

Prepare the journal entries recorded by Prologic Ltd to initially recognise the lease, and the necessary journal entries related to the lease on 30 June 2024.